Patrick von Sychowski, Editor, Celluloid Junkie
The COVID-19 pandemic was the single biggest challenge cinemas have faced in their 125-year history. Many were shuttered for months. And there was widespread fear – aided and abetted by alarmist articles – that people’s habits would permanently change to streaming as a result of not being able to go out, and as Hollywood studios discovered that they had a direct channel to consumers.
While we can see that much damage and misery was caused by the pandemic and the resulting lockdowns for what is now almost two years, it is worth taking a step back and examining what good, if any, may have come from this dark time. In some ways it has, similarly to other industries, accelerated already previously existing trends. However, it has arguably also led to the start of new things, the result of which will only be known in years to come. Here are 10 examples of silver linings to what was a very dark cloud.
1. Cinema Survived
While cinemas were battered, or, in the words of Vue’s Tim Richards, even “bloodied” by the pandemic, they did mostly survive. Yes, there were several smaller and independentlyoperated cinemas that did not make it through the pandemic, particularly in the US. There were also multiplexes that were permanently closed, not least where there was an issue with the lease. And there remain unresolved issues between cinema operators and landlords over unpaid rent.
But overall the vast majority of cinemas made it, thanks to a combination of government help, loans and their own ingenuity. There were even surprisingly few sales or mergers, with Singapore’s Golden Village-Cathay merger being the exception, rather than the norm. If anything, the pandemic has had less short-term impact on the industry than the cost of switching to digital had a decade or more earlier. While nobody would underestimate the toll on and task ahead for the industry, cinema has emerged better than many others in hospitality and leisure, not to say leaner.
2. Most films did not bypass cinemas
The howl of outrage that greeted the online-only release of Universal’s “Trolls World Tour” only diminished marginally for each subsequent title that bypassed cinemas and went straight to premium video-on-demand (PVoD). Universal did not help its case by crowing about the film making nearly $100 million in three weeks of digital rentals. While it was an eye-catching number, most media overlooked the fact that it was a result of parents being trapped at home with small children who had already watched everything else available. As Canadian cinema operator Vince Guzzo said, “It would have been impressive if it had been a billion.”
Despite the qualified Trolls success, Universal did not release most of its crown jewels through PVoD, with “F9” and “No Time to Die” holding out for over a year for a theatrical release. But studios did suffer from their investments sitting on the shelf, which explains why the likes of Paramount sold off titles like “Borat 2” and “Coming 2 America” to Amazon Prime. But the economics for pure PVoD did not stack up beyond 2020. As Guy Bisson from Ampere Analysis put it, “Only the most optimistic [pure PVoD] scenario makes more than a 20% depressed theatrical market.” To put it bluntly: the pure PVoD model failed, even when people were stuck at home.
3. Day and date tried and failed
While content that bypassed a cinema release completely did not end up triumphing, there was an equal fear that the ‘hybrid’ model would be the post-pandemic reality. This would see Hollywood studios release their films in cinemas and online at more or less the same time. Disney went furthest in this direction with its experimentation that included: 1) releasing films purely online, 2) releasing films in cinemas and with Premiere Access, where Disney+ subscribers could watch “Cruella” for an additional £19.99. And 3) where it released films in both cinemas and at no extra charge to its subscribers.
The latter tactic was also adopted by Warner Bros. (or, rather, AT&T) in making first-run films available in cinemas and on HBOMax at no extra cost. By the second half of 2021, both studios had walked back these plans, with Disney confirming it would keep a 45-day window and Warner Bros. saying that it would reinstate the exclusive theatrical window at the end of the year.
Even in the hybrid model we can see that the majority of films still kept some form of a theatrical window and exclusivity, even with the likes of Warner Bros. and Disney putting their entire output online.
According to data from Omdia, of the 133 films in their sample (2020 and 2021 titles), 16% were PVoD (15 from Universal, four from Lionsgate, and one each from Sony and STX); another six (4.5%) movies were PVoD and day-and-date theatrical, mostly Disney (four of the six). The majority, therefore, came from Universal’s PVoD strategy, which has continued with its latest, “Halloween Kills”. But even here, the release on the Peacock SVoD channel did not stop it from taking $50m at the US box office in its opening weekend. (Perish the thought that it might be because Peacock is not a popular platform like Disney+.)
Perhaps most importantly, the concept of major blockbusters going pure PVoD or hybrid SVoD/PVoD and cinema are no longer hypothetical scenarios. But they are ones that have been tested and a theatrical release window (albeit shorter) has been found to be the best value generator for films.
4. A pivot to cash-free and online payments – plus better data
The pandemic accelerated the use of contactless and cashfree payments, including for cinemas. While some markets such as Scandinavia and Asia already had a very high degree of electronic payments (Sweden’s second biggest cinema chain Svenska Bio went cash-free long before the pandemic), post-COVID we have seen even cash ‘hold-outs’ like Germany and Italy embrace online bookings and electronic payments. There are multiple advantages of cinemas going cashless.
There are less instances of fraud or theft, the likelihood of robberies decrease (common in Germany!), payments are streamlined with kiosks, terminals and POS for concessions, no chance of counterfeit bills and more. This has also been helped by the growth of contactless payment solutions such as Apple Pay and others. The message is that people are no longer as keen to hang on to and use physical bills and coins for payment in an age of heightened awareness of germs and virus transmission.
But the biggest benefit of the switch to online and cashless payments has been the ability of cinemas to gather more customer data. Even for those customers that are not part of a membership scheme it is possible to extract value and insights from the data that digital purchase patterns provide. In its presentation at UKCACON21, data insight company Movio confirmed that “ticket purchasing habits have changed,” since cinemas reopened. And Movio is urging cinemas to seize the opportunity offered to them, telling them “to cast your net to reach new audiences,” and to “go beyond your owned marketing channels,” based on the insights culled from the wealth of new data.
5. Private Cinema
While the concept of private cinema (or “on-demand” cinema) has been growing in China for many years, the pandemic made it take off in Europe and North America in a big way. The driving territory was Sweden, which kept its cinemas open – but restrictions meant that it was only able to welcome eight patrons to each screening.
The first to test renting out its auditoriums was the Scala cinema in Båstad, for both film viewing and gaming, in the early spring of 2020. The comfort and convenience, coupled with the feeling of safely being able to view films in a small ‘bubble’ of friends and family, has been shown to be attractive even after regular screenings resumed. The popularity of this concept is also driving dedicated spaces to be created, such as The (Any)Thing cinema in the Netherlands that is looking to expand across Europe.
As an added bonus, private rentals of screens, particularly for gaming, tend to over-index on food and beverage spend. The popularity of the private cinema concept may well prove to be the longest lasting legacy of change from the pandemic.
6. Staffing Issues
With thousands of cinema staff furloughed or made redundant in 2020 and 2021, there has never been more focus on staffing issues than as the industry emerges from the pandemic. With the squeeze on employees in the service sector, the cinema industry, alongside other hospitality businesses, has had to re-evaluate how it hires, trains and retains staff. For those that were kept on, mainly in senior management, there has been an appreciation of remote working and staying in touch with all employees, as well as both internal and external communication. The added pressure has also increased the awareness of mental health issues and the need to talk openly about workplace challenges relating to this.
At the moment cinemas are not alone in facing shortages in staffing and wage pressures. There are several ways this can be overcome. South Korean cinemas have gone for perhaps the most futuristic, with a robot greeting customers, telling them which auditorium to go to and encouraging social distancing. While this is not something that will take off elsewhere on a large scale anytime soon, there will have to be a greater degree of automation and self-service in the future. Pathé Netherlands demonstrated this at CineEurope with Hendrik ten Napel pointing to heated back-fill popcorn cabinets complementing self-serve beverage solutions like Coca-Cola’s Freestyle fountains and self-scan checkouts. With ticketing barriers staff can be deployed to more meaningful roles, such as a host greeter at the start of each screening.
7. Cinematic Programming
Cinema lovers are currently spoiled for choice with “three years’ worth of films releasing in 18 months,” as Vue’s Tim Richards put it at CineEurope. There could even be said to be a traffic jam on the silver screen, with the release of “Dune” delayed by over a month in the UK and US until after “No Time To Die”, compared to the rest of Europe. While there is a risk that some of the larger titles may end up cannibalising each other, an argument could be made that cinema audiences have emerged from lockdown with a newfound hunger for a wider variety of films.
When Everyman was preparing to reopen its cinemas for the second time this summer, Head of Film Serena Gill, said that their members contacted them, “urging us not to go back to mainly showing blockbusters.” The previous summer, when the only big Hollywood title released was Warner Bros.’ “Tenet”, their cinemas had to get more experimental with programming and give a wider release to what would previously have been considered to be niche titles. While it is easy for customers to say this and still only come out for Bond, that has not proven the case, with a re-release of Oscar-winner “Fargo” selling hundreds of tickets across Everymans’ cinemas more than 25 years after it was released. And despite it being available to rent for just £3.49 online.
Film director Michael Mann posited that the steady growth of the streaming platforms has meant that audiences are switching more to global films rather than just Hollywood output. Although, it is worth remembering that (Best Picture Oscar Winner) “Parasite” was a global hit more than two years before Netflix’s “Squid Game”, so the appetite is there.
8. Staying in touch with customers
When cinemas closed they knew they had to keep in touch with customers, even if they couldn’t offer them anything to show in cinemas. This unleashed a wave of creativity among many cinema chains, particularly arthouses and independents. Online quiz nights, viewing parties, newsletter polls, and tie-in online screenings with companies such as Curzon Home Cinema, Kino Lorber and La Toille saw cinemas embrace streaming as an add-on to the cinema experience, rather than a substitute. Secret Cinema partnered with luxury ice cream brand Häagen-Dazs for an immersive film night called ‘Secret Sofa’ that kicked off with “The Grand Budapest Hotel” and is still continuing with its “Ghostbusters” at-home experience – even after cinemas (secret or not) had reopened.
While cinemas have been active to varying degrees on social media and with traditional marketing tools such as newsletters, the pandemic showed us that more was needed – and possible. Cinemas are shouldering an increased responsibility for the exposure of the films and other content that they’re showing. This is not simply because the distributors’ role is changing, but because cinemas are in possession of more customer data, while also having to program nontraditional screenings like event cinema, themed screenings, festivals, private rentals and more.
9. Sanitation/cleaner toilets
For anyone – like yours truly – who has bemoaned the state of toilets in a cinema, a major silver lining of the pandemic is a focus on cleanliness that has never been greater. Washrooms are the proverbial canary in the coalmine that give an indication of the overall attention to health, safety and sanitation in cinemas. We cannot check for ourselves the state of the HVAC (heating, ventilation, air conditioning) filters, the food hygiene behind the scenes or if fire exits are working. But the sign of a well-run cinema includes regular checks that toilets are kept clean and stocked. Even with staffing shortages there should be no less attention paid to the bathrooms than there is to the Coke dispensers. But it’s important that these do not simply become ‘hygiene theatre’, while important aspects like ventilation and traffic flow of people are neglected.
10. The next time
The COVID-19 pandemic caught almost everybody by surprise. On an industry conference call among US cinema operators on 29 January 2020 discussing the year’s outlook, not one participant thought to mention that one-third of the world’s cinema screens were dark because of a pandemic; mainly because all of those screens were in China. Even when the outbreak spread and caused lockdowns in Iran and then Italy, there was still hope that the rest of the world would escape it. So when the next pandemic happens, which the World Health Organisation reminds us is ‘when’ not ‘if’, cinemas – and society – will be better prepared. Right?